Agenda and minutes

To undertake a roll call and receive any apologies for absence.

The roll call was taken. There were no apologies for absence.

To note the Terms of Reference of the Committee and any changes to membership.

The Committee’s Terms of Reference and the Committee’s membership was noted.

Councillor Turner was welcomed to his first meeting as member of the Committee.

Members are invited to disclose any disclosable pecuniary interest they have in any item on the agenda which comprises

1          Details of any employment, office, trade, profession or vocation carried on for       profit or gain.

2          Details of any payment or provision of any other financial benefit (other than from the authority) made or provided within the relevant period in respect of any expenses incurred by you in carrying out duties as a member, or towards your election expenses.  (This includes any payment or financial benefit from a trade union within the meaning of the Trade Union and Labour Relations (Consolidation) Act 1992).

3          Details of any contract which is made between you (or a body in which you have a beneficial interest) and the authority

(a)       Under which goods or services are to be provided or works are to be           executed; and

            (b)       Which has not been fully discharged.

4          Details of any beneficial interest in land which is within the area of the authority. 

5          Details of any licence (alone or jointly with others) to occupy land in the area of the authority for a month or longer. 

6          Details of any tenancy where (to your knowledge)

            (a)       The landlord is the authority; and

            (b)       The tenant is a body in which you have a beneficial                                                     interest.

7          Details of any beneficial interest in securities of a body where

(a)       That body (to your knowledge) has a place of business or land in the          area of the authority; and

(b)       Either –

(i)      The total nominal value of the securities exceeds £25,000 or one        hundredth of the total issued share capital of that body; or

(ii)     If that share capital of that body is of more than one class, the total nominal value of the shares of any one class in which the relevant person has a beneficial interest exceeds one hundredth of the total issued share capital of that class.

In addition, you must also disclose other non-pecuniary interests set out in the Code of Conduct where these have not already been registered.

Note

A “disclosable pecuniary interest” is an interest of a councillor or their partner (which means spouse or civil partner, a person with whom they are living as husband or wife, or a person with whom they are living as if they are civil partners).

There were no disclosures of interest made.

RESOLVED,that the press and public be excluded from the meeting during consideration of the following reports as they contain exempt information relating to the financial or business affairs of any particular person (including the authority holding that information) by virtue of Paragraph 3 of Part 1 of Schedule 12A of the Local Government Act 1972;

14        Draft Pensions Administration Business Plan and Budget 2021/22 (Part 2)

15        Border to Coast Pensions Partnership Ltd (BCPP) Business Plan 2021-2024 and Budget 2021/22 and Related Shareholder Decisions

16        Monitoring Report for the Quarter Ended 31 December 2020 – Part 2

17        Training - Property

18        Verbal Update – Emerging Issues

19        Presentation – Investment Strategy Review

20        Investment Sub Group Activity to February 2021

21        Closing Comments

To confirm as a correct record the minutes of the Cumbria Pensions Committee held on 18 December 2020

RESOLVED that, the minutes of the meeting held on 18 December be approved as a correct record.

This is a standing item.  To receive concerns, queries and comments from non-County Council employers and individual members of the Cumbria Local Government Pension Scheme

There were no representations made at this meeting of Cumbria Pensions Committee.

To receive for information a schedule of future meetings of the Cumbria Pensions Committee

The Schedule of Future meetings that had been published with the Agenda was noted.

To receive the minutes of the BCPP Joint Committee meeting held on 24 November 2020

The Chair presented the minutes of the BCPP Joint Committee meeting held on 24 November 2020.

The Chair referred to an issue of concern at the meeting which was climate change and how it would be dealt with. He reminded members of an informal member meeting held in February 2021 to consider Cumbria’s position on responsible investment and thequestion of dis/investing in companies. 

RESOLVED that, the BCPP Joint Committee minutes from the meeting held on 24 November 2020 be noted.

To receive a report from the Director of Finance (S151 Officer)

A report from the Director of Finance (S151 Officer) was considered regarding an Update From The Cumbria LGPS Local Pension Board. The report summarised matters discussed by, issues arising from and any recommendations made by the Cumbria LGPS Local Pension Board at the recent quarterly meeting held on 13 January 2021.

The Chair of the Cumbria LGPS Local Pension Board presented the report to members and gave a briefing on the business conducted at the meeting. This included an update on Cumbria Pensions Committee decisions.

Ms Powell talked about the policy decisions made by the Committee and advised that officers had been asked to involve the LGPS Pension Board more in shaping policy development in future. In relation to the Cyber Crime risk which was included in the Risk Register, officers had been asked to review the AON cyber-crime checklist for pension schemes and consider whether it could help with management of the risk.

The excellent quality of in house training sessions for Board members was highlighted by Ms Powell. The Board had welcomed the excellent performance of Local Pensions Partnership – Administration (LPPA) – the Fund’s pensions administrator.

There were no questions from members on this item.

The Chair proposed acceptance of the recommendation as set out in the report to the Committee. As there was no dissent, it was,

RESOLVED that, the update from the Cumbria Local Pension Board be noted.

To receive a training session on Discretions from Eversheds

A training session on Discretions was provided by Mr G Delderfield, Partner at Eversheds Sutherland. The presentation covered the following:

·         The role of the administering authority

·         Duties and decisions

·         Types of discretions

·         Exercising discretions

·         Discretions Policy

A member asked whether the administering authority would have to exercise a number of different discretions if an individual member was a member of multiple schemes. Mr Delderfield commented that this could be the case and highlighted that occasionally, a number of historical discretions under a particular set of revoked regulations would need to be revisited. It was noted that identifying the correct discretion could sometimes be complex for the employer, however they were usually listed under current discretions. Mr Delderfield advised that there should be a focus on current discretions as the majority of discretions were made under current regulations.

A member asked if Fund members were regularly asked to update their personal details. The Group Finance Manager - Pensions Investments and Insurance confirmed that this was the case and explained the LPPA were exploring how this could be improved.

After commenting on the large amount of money involved in discretions, a member asked what advice was given to scheme members on how to make a case in order to obtain the decision they wanted. He asked for information about the appeal procedure. The Group Finance Manager - Pensions Investments and Insurance updated members on Cumbria’s policy and process relating to death grants and the role of the Discretions Panel considering death grants and the role of the Discretions Panel.Further details were provided for members about the nomination form and the reasons why the nomination form should be correct and up to date.

A member stated that his interest lay particularly in how many cases the decision didn’t go the way the person receiving the benefit had expected. Of interest was how the person receiving the benefit was given advice on this matter. The Director of Finance (Section 151 Officer) reminded the Committee that in order to give pensions advice, an organisation had to be regulated and that the County Council was not regulated to give such advice. She stated that discretions did present a risk to both the administrator and the individual and although officers did signpost individuals, they were advised to seek regulated advice. The Director of Finance (Section 151 Officer) explained about following the Snook Case guidance and commented on how careful consideration was given by the Death Grants Panel to individual cases. She was aware of the importance of considering cases very carefully as the death in service grant often was of a high monetary value.

Mr Delderfield explained the appeals process and noted that as long as a decision was reasonable, it was unlikely that it would be challenged. He explained the Ombudsman’s role to members.

A member referred to his personal experience of dealing with individuals’ ‘expression of wishes’ on nomination forms.

Mr Delderfield stated that up to date and accurate nomination forms would make it easier  ...  view the full minutes text for item 146.

To receive a report from the Director of Finance (S151 Officer)

A report from the Director of Finance (S151 Officer) was considered regarding the Cumbria Local Government Pension Scheme - Fund Policy Document Annual Review. The report incorporated all changes to existing policies to reflect current circumstances and regulation changes in 2020/21. The report also advised that the training plan had been updated to incorporate areas highlighted following the completion of the annual training needs assessment questionnaires.

The Finance Manager - Pensions Investments and Governance reported on the key areas of change to the Fund Policy Document made during the year: the Admission and Termination policy, the Administration Strategy and Communications Policy and the Investment Strategy Statement. It was highlighted that the Training Policy and Plan had been updated. The policies had been included in the agenda pack for members to review. The changes were reported in detail to the Committee.

Members’ attention was drawn to the Investment Strategy Statement. The Finance Manager - Pensions Investments and Governance, advised that the Committee was being asked to approve the changes to the document subject to the approval of the Fund’s Target Investment Strategy which was being proposed later in the Agenda at Item 20 – Investment Sub Group Activity to February 2021. It was highlighted that if the Fund’s Target Investment Strategy was not approved at agenda item 20, a revised Investment Strategy and updated policy would be brought back to the Pensions Committee for consideration at the June 2021 meeting.

There were no member questions or comments on this item.

The Chair proposed acceptance of the recommendations as set out in the report to the Committee. As there was no dissent, it was,

RESOLVED that,

1             The changes to the Administration Strategy and Communications Policy be approved.

2             The changes to the Investment Strategy Statement be approved (this item was approved following the discussions at item 20 - The Fund’s Target Investment Strategy)

3             The updated Training Policy and 2021/22 Training Plan be approved.

4             The Fund Policy Document be noted and minor amendments be made throughout the document.

Note: After agenda item 20 was considered later on in the Part 2 section of the meeting and all recommendations were agreed, recommendation 3.2 as set out in the report was agreed.

To receive a report from the Director of Finance (S151 Officer)

A report from the Director of Finance (S151 Officer) was considered regarding the Monitoring Report for the Quarter ended 31 December 2020 - Part 1. The report advised Members of any material risk, administration, investment performance, governance, and policy issues of the Fund for the quarter ending 31 December 2020. The report also identified any current governance issues and national regulatory changes and outlined the performance of the whole portfolio and movement on liabilities over the quarter to 31 December 2020.

The Group Finance Manager - Pensions Investments and Insurance guided members through the report, reporting on Risk Management, Pensions’ Administration, Investment Management and Oversight and Governance (including Policy and Regulation). In relation to Risk Management, it was reported that because the Government had announced that it was to revoke the Exit Payment Cap legislation, the risk had been removed from the register. The Group Finance Manager - Pensions Investments and Insurance was pleased to report on the continued excellent performance of the LPPA which was a positive outcome given the impact of the COVID 19 pandemic. He referred to the processing time of putting people into pension and highlighted that the LPPA was now reporting processing times. Members were provided with detail on cases where it was taking longer than 100 days to put a member into a pension.

In relation to investment management, the Group Finance Manager - Pensions Investments and Insurance welcomed that the Fund was now in excess of £3 billion for the first time and reported on growth for the quarter. In relation to oversight and governance, the Group Finance Manager - Pensions Investments and Insurance drew members’ attention to the BCPP Quarterly Stewardship Newsletter Quarter 4 and that BCPP had been a cosignatory in a letter to the Government about setting emission targets. Members were informed about a number of key developments on policy and regulation. This included an update on the government consultation on the McCloud case. The impact of the Government revoking the Exit Payment Cap legislation and proposed similar legislation was explained to the Committee. Details on a new Government consultation on an increase in pension age commencing in 2028 were outlined. The Committee was reassured that officers would review the LGA’s response to the consultation in case there was anything to add.  The ‘Good Governance in the LGPS’ final report issued by the Scheme Advisory Board and the expected MHCLG statutory guidance to accompany it was highlighted. The next steps which would include input from the Pensions Committee was reported.

The Chair praised the performance of the LPPA and the value of the Fund given the volatility of the stock market and the impact of the COVID 19 pandemic.

A member welcomed the positive report of the Group Finance Manager - Pensions Investments and Insurance. In terms of the Risk Register and the Information Security Arrangements, he asked that it be made clear in the Risk Register that the County Council would not pay any money to a cyber-criminal holding  ...  view the full minutes text for item 148.

To receive a report from the Director of Finance (S151 Officer)

A report from the Director of Finance (S151 Officer) was considered regarding the Draft Pensions Administration Business Plan and Budget 2021/22. The report advised members of the Draft Business Plan for 2021/22 setting out the Pension Fund’s proposed work plan for the year and of the Draft Budget 2021/22 required to deliver the proposed Business Plan for the Cumbria Local Government Pension Scheme (the Fund).

The Senior Manager - Pensions and Financial Services guided members through the report. She considered that the ensuing year would be challenging therefore the Business Plan and Budget had been drafted to address these challenges. She expected that there would need to be some flexibility in 2021/22 to deal with the challenges ahead. Any changes would be brought to the Committee for consideration. The key objectives were outlined for the Committee, these related to pensions administration, investment management and oversight and governance.

Areas of key work were reported in detail. This included officers waiting for the imminent resolution to the McCloud case, data quality which was a constant challenge and general communication with members of the Fund and Scheme Employers. Investment options would be continually reviewed with BCPP and work was being undertaken with partner funds on the new Stewardship Code 2020. Core governance activities were reported such as the refresh on the Training Policy.

The proposed budget was explained and the drivers for change were reported. Members’ attention was drawn to the 2021/22 draft budget with the key areas of change since 2021 being highlighted. It was noted that there had been a realignment of costs with activities.

The Senior Manager - Pensions and Financial Services informed the Committee that a number of changes were expected to be made to the LGPS as a whole. These were detailed for members. Because of the changes, resourcing would be kept under review and members would be informed. It was highlighted that as there were continual regulation changes and the scheme was complex to administer, related costs would be regularly monitored. The Senior Manager - Pensions and Financial Services was pleased to report that costs per member, compared to the CIPFA average costs per member were, on average, slightly lower over the last three years.

The Senior Manager - Pensions and Financial Services reported in detail on changes in the budget for Oversight and Governance. This was to reflect a number of changes including costs for independent advice and external audit.

A member asked about Local Government Review. He asked about the impact of this on the Fund and whether officers were working on a number of scenarios given the number of options under consideration. The Director of Finance (Section 151 Officer) stated that officer work was underway on this and whatever the structure outcome, officers would be able to respond positively. She commented on the importance of considering who had responsibility of administering the Fund as it was essential that pensions were provided for. She referred to other local authority bids and how they managed their  ...  view the full minutes text for item 149.

To receive a report from the Director of Finance (S151 Officer)

A report from the Director of Finance (S151 Officer) was considered regarding Draft Pensions Administration Business Plan and Budget 2021/22 (Part 2). The report provided details of the Fund’s investment management fees budget for 2021/22, which, due to their confidential nature, were not reported publicly.

A member asked a question on investment management fees. Detailed responses were provided by the Director of Finance (Section 151 Officer) and the Senior Manager - Pensions and Financial Services.

The Chair proposed acceptance of the recommendations as set out in the report to the Committee. As there was no dissent, it was,

RESOLVED that, the detailed 2021/22 budget for investment management fees as summarised in the 2021/22 Draft Business Plan and Administration Budget report presented in Part 1 of the meeting be noted.

To receive a report from the Director of Finance (S151 Officer)

A report from the Director of Finance (S151 Officer) was considered regarding the Border to Coast Pensions Partnership Ltd (BCPP) Business Plan 2021-24 And Budget 2021/22 and Related Shareholder Resolution. The report set out the 2021/22 Operating and Project Implementation budgets for Border to Coast Pensions Partnership Ltd (“BCPP”) and the BCPP Strategic Business Plan 2021-24 (which covered the financial years 2021/22 to 2023/24).

The Senior Manager - Pensions and Financial Services explained that a final decision on whether to approve the decision relating to BCPP Executive Director remuneration would not be made by the Committee at this meeting as circumstances had changed since the agenda had been published. It was proposed that this decision be delegated to the Director of Finance (Section 151 Officer), in consultation with the Chair and Vice Chair of the Committee.

A number of members made comments on the Shareholder resolution in terms of pay increases for certain officers. It was moved and seconded that the decision to either approve, not approve  or abstain from the vote on the Shareholder resolutions relating to BCPP Executive Director remuneration and thereby agree how the Fund’s votes on those resolutions be cast, be delegated to the to the Director of Finance (Section 151 Officer), in consultation with the Chair and Vice Chair of the Committee.

The Chair proposed acceptance of recommendations 1, 2 and 3 as set out in the report to the Committee and that the decision on Shareholder resolutions be delegated to the to the Director of Finance (Section 151 Officer), in consultation with the Chair and Vice Chair of the Committee. As there was no dissent, it was,

RESOLVED that,

1     The detailed 2021/22 budget for investment management fees as summarised in the 2021/22 Draft Business Plan and Administration Budget report presented in Part 1 of the meeting be noted.

2     The proposed BCPP Operating and Project Implementation budgets for 2021/22 and Business Plan 2021-24 be noted.

3     The Committee supports the Chair of the Pensions Committee, in his capacity as the Council’s Shareholder representative for the Company, to authorise the vote to approve the BCPP Strategic Business Plan for 2021-24 and the Operating and Project Implementation budgets for 2021/22.

4     The decision to either approve, not approve or abstain from the vote on the Shareholder resolutions relating to BCPP Executive Director remuneration and thereby agree how the Fund’s votes on those resolutions be cast, be delegated to the Director of Finance (Section 151 Office), in consultation with the Chair and Vice Chair of the Committee.

To receive a report from the Director of Finance (S151 Officer)

A report from the Director of Finance (S151 Officer) was considered regarding the Monitoring Report for the Quarter Ended 31 December 2020 - Part 2. The report advised Members of any matters that were considered to be Part 2 (due to the inclusion of exempt information relating to commercially sensitive matters of third parties including employers in the Fund, tax recovery cases, class actions and fraud cases), and therefore excluded from public disclosure, arising during the quarter ending 31^st December 2020. These matters were generally in regard to either governance or employer issues.

A question was asked relating to material data breaches.

The Chair proposed acceptance of the recommendations as set out in the report to the Committee. As there was no dissent, it was,

RESOLVED that,

1             The quarterly monitoring Part 2 items of the Fund for the period to 31^st December 2020 be noted.

2             The Committee supports the approval by the Section 151 Officer of the application to join the Cumbria Fund from:

                       i.       Bulloughs Cleaning Services Limited on the basis that a guarantee is provided by Caldew Academy.

                      ii.       Caterlink Limited (for services to Caldew Lea Primary School) on the basis that a guarantee is provided by Cumbria Education Trust.

                     iii.       Caterlink Limited (for services to St Bernard’s Catholic High School) on the basis that a guarantee is provided by Cumbria County Council.

                    iv.       Priority Facilities Limited on the basis that a guarantee is provided by Cumbria County Council.

To receive a presentation on property from BCPP

A training session was held on Property. This was delivered by Mr T Sankey from Border to Coast Pensions Partnership.

The presentation covered:

·         How to access the property market

·         Examples of property to invest in

·         Real estate returns

·         Long term return components

·         Challenges to find value

·         Market context and forecast.

There was a discussion on investment in office space and high street retail.

RESOLVED, that the position be noted.

To receive a verbal update on emerging issues

There were no emerging issues to report on this occasion.

To receive a presentation from ISIO

A presentation was delivered on Investment Strategy Review. This was delivered by Mr D O’Hara, Partner at ISIO Group Limited.

The presentation covered:

·         The 2020 interim strategy

·         Evolution of a longer term strategy

·         Details of the proposed way forward

·         Next steps

Discussion took place on the risks related to the COVID 19 pandemic, following ‘Brexit’ and investment in retail property.

RESOLVED, that the position be noted.

To receive a report from the Director of Finance (S151 Officer)

A report from the Director of Finance (S151 Officer) was considered regarding the Investment Sub Group’s Activity to March 2021. The report outlined activities of the Investment Sub Group (ISG) meetings on 12th January 2021 (special meeting), 17th February 2021 (special meeting) and 2nd March 2021, including any decisions made by the Section 151 Officer and the proposed future work schedule in respect of the Investment Sub Group.

Members were reassured that the Investment Sub Group had reviewed the Asset Allocation Strategy in detail.

The Chair proposed acceptance of the recommendations as set out in the report to the Committee. As there was no dissent, it was,

RESOLVED that,

1             The proposed Target Investment Strategy (i.e. asset allocation) be agreed and the outcomes of the review in support of it be noted.

2             The progress of the Investment Sub Group from November 2020 to 2nd March 2021, including noting the support for the Director of Finance (Section 151 Officer) to enact the investment decisions taken under her delegated powers be noted.

3             The performance of the Fund over the quarter be noted.

4             The proposed work programme of the Investment Sub Group for the next reporting period be agreed.

Note: As all the recommendations were agreed for this item, recommendation 3.2 relating to approval of the Investment Strategy Statement in Agenda item 11 was therefore agreed.

To receive closing comments from the Chair

The Chair of the Committee thanked all in attendance for their contribution to the meeting.